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Stop us if you’ve heard this one before.

Late last week, Aaron Beam Jr., HealthSouth Corp.’s first chief financial officer, pleaded guilty to committing bank fraud. In doing so, Beam became the fifth—and likely the last—former HealthSouth CFO to plead guilty to fraud charges. Since going public, the company has had but five finance chiefs.

Beam agreed to enter a guilty plea in the government’s ongoing case against former executives at the beleaguered rehabilitation-hospital chain.

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The Justice Department alleges that in 1996, Beam and other HealthSouth senior executives collaborated in providing fraudulent financial data to a syndicate of lenders including AmSouth Bank. Allegedly the tarted-up numbers helped HealthSouth secure a $1.25 billion line of credit.

Rick Swagler, an AmSouth spokesman, says the bank’s share of the lending relationship (a $55 million line of credit) with HealthSouth “ended some time ago.” He also notes that the U.S. Attorney informed AmSouth that she named the bank in the Aaron Beam matter “only to demonstrate that she had jurisdiction.” AmSouth is the only bank from the Northern District of Alabama in that deal.

Beam, who was also a HealthSouth co-founder, served as finance chief from 1984 to 1997, when he resigned after a reported falling out with former CEO Richard Scrushy. He is the 11th executive to be charged in the government’s criminal investigation into HealthSouth’s overstatement of $2.5 billion.

The bank-fraud charge carries a maximum sentence of 30 years in prison and a fine of up to $1 million. No word yet on whether the five former CFOs will get their own wing in the cellblock.

In other HealthSouth news, Neal Webster, a former internal auditor for the company, provided courtroom testimony in U.S. District Court that reportedly suggests HealthSouth’s accounting irregularities occurred years before government prosecutors claim they began.

Webster also reportedly testified that Scrushy knew about the alleged bookkeeping tricks.

According to a Reuters account, Webster asserted that Scrushy fired him in 1989 after Webster raised concerns in a meeting with the chief executive about old unpaid accounts receivables that the auditor thought should be written off.

Webster also reportedly testified he was told the receivables could not be written off and was reprimanded by Scrushy: “You don’t understand big business,” Webster recalled his boss telling him. “We’re under pressure to make certain numbers. We have a responsibility to stockholders and shareholders.”

Scrushy is in court trying to get a judge to free up millions of dollars of his assets that were frozen after the Securities and Exchange Commission hit him with civil charges last month. His lawyers continue to argue that Scrushy knew nothing about the alleged accounting scam at HealthSouth.

As CFO.com reported last week, Barbara Patton, manager of HealthSouth’s accounts-payable department, also testified that she has doubts that Scrushy knew what was apparently going on in the HealthSouth finance department.

On Friday the SEC also adopted amendments under the Sarbanes-Oxley Act that “prohibit officers and directors of an issuer, and persons acting under the direction of an officer or director, from coercing, manipulating, misleading, or fraudulently influencing the auditor of the issuer’s financial statements if that person knew or should have known that such action could render the financial statements materially misleading.”

That ought to clarify things.

Riverstone May Face Formal SEC Investigation

Riverstone Networks announced on Friday that the SEC has requested that the company voluntary disclose certain information in connection with its accounting practices. Riverstone management also noted that it has been informed that the commission may open a formal investigation on the same topic.

The company’s management intends to cooperate fully with the SEC’s request for information. Executives at Riverstone could not be reached for further comment, according to Reuters.

Last week the telecom network equipment maker said it would split the office of chairman and chief executive and that it was searching for a new CEO. Reportedly the change was made to run the business better, and in response to investors’ general scrutiny about corporate governance.

With the U.S. telecom-equipment market in a recession, Riverstone has sought in the past several quarters to offset weak demand by pushing hard to gain sales abroad, particularly in Asian markets.

PCAOB Strengthens McDonough’s Hand

On Friday the Public Company Accounting Oversight Board voted to give its incoming chairman more power. William McDonough, currently president of the New York Federal Reserve Bank, will now carry the title of chief executive officer when he joins the board. McDonough, who must still pass a background check before assuming the post, will also have greater authority to hire and fire staff.

The increased sway apparently comes at the urging of William Donaldson, chairman of the SEC, the agency charged with overseeing the accounting board. While the PCAOB voted unanimously to amend its bylaws, panel member Kayla Gillan did not seem pleased by the SEC’s interference. According to a Wall Street Journal account of a PCAOB meeting on Friday, Gillan said that combining the chairman and CEO roles “creates a structure that lacks accountability and independence.”

But Donaldson apparently wanted to make it clear who is calling the shots at the PCAOB. “It’s impractical to have a board with five people and basically no leader,” a person familiar with the matter told the Journal. “The bylaws needed to be more specific about the powers of the chairman, and the chairman needed some power.”

If the PCAOB did not bow to the SEC’s request, it appears the commission was not going to sign the PCAOB into official existence. Such a move could have delayed the process for registering accounting firms, which needs to be completed 180 days after the SEC officially recognizes the board.

As CFO.com reported on Friday, the PCAOB recently approved a new system to register accounting firms in and outside the United States. Under the system, U.S. accounting firms must be registered online with the oversight body by October 26, while non-U.S. firms have until April 2004. Such plans also need to be approved by the SEC.

Nvidia Cuts a Deal—Tentatively

Nvidia Corp. has reportedly staved off the threat of an SEC enforcement action.

The chip designer, whose accounting practices have been under investigation by the SEC since early 2002, announced in its annual report that it reached a tentative deal with the commission this month. That agreement came after the company received a Wells notice from the commission, indicating the SEC staff would likely recommend taking enforcement action.

According to a Reuters report, Nvidia will not have to pay fines or penalties. Instead, the company only faces a cease-and-desist order against future violations of certain federal securities laws. Nvidia warned, however, that the review of the agreement could take weeks or months to complete, and offered no certainty that the SEC would approve the deal.

Last year Nvidia management said that as a result of the investigation and its own internal review, it would restate results going back to its 2000 fiscal year to correct accounting errors.

Delta’s Exec Compensation Faces Shareholder Approval

Delta Air Lines may soon be cutting back on more than just its lines.

On Friday shareholders reportedly won out against executives who opposed two pilot-sponsored resolutions. Those resolutions called for shareholder approval for senior executive severance packages and the treatment of employee stock options as an expense.

The resolution for approval on severance packages passed with about 58 million votes in favor and about 49 million opposed, according to Reuters. “I’m ecstatic,” Delta pilot Michael Messmore told the wire service. He has made the proposal for four straight years. The resolution for expensing stock options on Delta’s income statement passed, with about 65 million votes in favor and about 41 million votes against.